France, Germany pledge assistance on debt relief

? President Bush’s special envoy on Iraq won agreement Tuesday from Germany and France, two of the most ardent opponents of the American-led war, to ease Baghdad’s huge debt burden.

The agreement came after former Secretary of State James A. Baker III overcame serious German misgivings during a meeting with Chancellor Gerhard Schroeder about the U.S. exclusion of German firms from Iraqi reconstruction. Baker earlier had what he called “very fruitful” talks with French President Jacques Chirac in Paris.

France, Germany and the United States agree that there should be substantial debt reduction for Iraq in the Paris Club, a 19-member group of creditor nations, the leaders of the three nations said in a joint statement issued by the White House Tuesday afternoon.

“Debt reduction is critical if the Iraqi people are to have any chance to build a free and prosperous Iraq,” according to the statement by President Bush, French President Jacques Chirac and German Chancellor Gerhard Schroeder.

“The exact percentage of debt reduction that would constitute ‘substantial’ debt reduction is subject to future agreement between the parties.”

Iraq owes $40 billion to the United States, France, Germany, Japan, Russia and others in the Paris Club. Other countries and private creditors are owed at least $80 billion in addition.

The agreement was the first concrete cooperation in rebuilding postwar Iraq from two nations that tried to prevent the war and have refused to contribute troops to the postwar stabilization mission.

It appeared to be an effort to project a united front. Germany and France have been eager to reconcile with the United States despite their misgivings about the U.S. invasion.

Germany repeated its concerns about the contract issue, and U.S. officials left open the possibility that they would discuss it further.